KUALA LUMPUR (Oct 30): Tan Sri Quek Leng Chan’s Guocoland (Malaysia) Bhd is selling a 0.292ha piece of freehold, vacant land on Jalan Changkat Kia Peng for RM87.92 million to Kumpulan Wang Persaraan (Diperbadankan) (KWAP).

Guocoland told Bursa Malaysia this evening that it is expected to make a net gain of RM19.94 million from the sale, which represents a 2.98 sen per share in earnings per share and net assets per share of the company.

Guocoland's indirect unit Sabna Development Sdn Bhd entered into a sale and purchase agreement (SPA) with KWAP today for the sale of freehold tract — currently charged to Affin Bank Bhd — to realise its RM55.46 million investment on the land, which was made on Jan 14, 2008.

As at June 30, 2015, the net book value of the land stood at RM61.74 million; the market value of the land, as at Jan 31, 2013, was valued at RM62 million by CB Richard Ellis (Malaysia) Sdn Bhd.

Guocoland said the purchase price of the land was arrived at on a willing buyer-willing seller basis, after “arm’s length consideration”.

Guocoland said proceeds of the sale will be used to repay borrowings and for working capital.

“Based on the audited consolidated financial statements of the company for the financial year ended June 30, 2015, the net gearing ratio of Guocoland Group is expected to decrease from 1.03 times to 0.94 times, upon completion of the proposed disposal,” the filing stated.

The proposed disposal is expected to be completed in the first quarter of year 2016, Guocoland said. Guocoland (fundamental: 1.1; valuation: 2.1) shares closed one sen or 0.73% lower at RM1.36, for a market capitalisation of RM952.62 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)